The Food and Agriculture Organisation of the United Nations (FAO) reported a slight decrease in the world food commodity prices benchmark in January. This decline was primarily driven by reductions in cereal and meat prices, which outweighed increased sugar prices.

The FAO Food Price Index averaged 118 points in January, down one percent from December and 10.4 percent from the previous year. The FAO Cereal Price Index declined by 2.2 percent, with wheat and maise prices falling due to increased competition among exporters and improved crop conditions. Rice prices, however, rose by 1.2 percent due to strong export demand.

The FAO Vegetable Oil Price Index rose marginally by 0.1 percent, driven by increased palm and sunflower seed oil prices, offsetting declines in soy and rapeseed oils. The FAO Dairy Price Index remained essentially unchanged, with increases in butter and whole milk powder prices balancing out declines in skim milk powder and cheese prices.

The FAO Meat Price Index decreased by 1.4 percent, driven by abundant supplies from leading exporting countries, particularly poultry, bovine, and pig meats. However, ovine meat prices increased due to high global import demand.

The FAO Sugar Price Index increased by 0.8 percent, supported by concerns over below-average rains in Brazil and unfavourable production prospects in Thailand and India.

Additionally, the latest Cereal Supply and Demand Brief forecasted record cereal production in 2023, with global coarse grain output reaching an all-time high. Increased feed use, particularly in the European Union, Australia, and the United States, contributed to higher cereal utilisation forecasts for 2023/24. As a result, the global cereal stocks-to-use ratio is expected to remain stable, with global trade in cereals forecasted to increase slightly, led by larger traded volumes of coarse grains.

Published Date: February 16, 2024